Home Exchange and Travel Insurance

by John Mensinger on June 30, 2013

Insurance is a complicated subject because laws and policies vary by country. Everybody’s situation is unique. Certain home exchange agencies, for example Knok, offer insurance to their members. Knok’s policy provides cover for damage to an exchange home, but they also recommend that their customers consider travel insurance.

Many home exchange travelers wonder if it’s useful or necessary to buy travel insurance when they haven’t spent much up-front money on their trip. Truth be told, some house swap travelers don’t need travel insurance. Others, however, could be making a costly mistake if they travel without it.

Home exchange travelers are at risk of the following when they travel:

● The exchange has to be cancelled and you’ve already paid for non-refundable trip costs like airline tickets, pre-paid rental cars, and other non-refundable lodging on either end.
● You’re traveling outside your health insurance network and need medical care for an illness or injury (perhaps due to a car accident).
● You’re in a foreign country and need a medical evacuation to a facility that can treat you.
● You, or a travel companion dies on your trip and it’s necessary to transport the body back home.

Here are 4 reasons every home exchange traveler should look into travel insurance.1. Your exchange is cancelled by your host
There are many reasons your home exchange host might need to cancel – an illness in the family, unexpected home repairs, a job loss, for example.

If your host has to cancel your home exchange prior to your trip, you could lose a lot of non-refundable trip expenses like airfare, other lodgings, pre-paid rental cars, tours, and more depending on your trip.

To protect yourself, you’ll need a travel insurance plan with ‘cancel for any reason’ coverage. It’s pre-trip cancellation insurance that ensures you’ll be reimbursed for the non-refundable trip costs if your trip has to be cancelled for any reason at all.2. You have to cancel the trip due to an emergency
The reasons you might have to cancel a trip vary depending on your life circumstances, but they may include recovering from a traffic accident, finding a new job after a layoff, an unfortunate health diagnosis, and more.

The reason for the cancellation must be covered by the travel insurance plan and most plans cover emergencies like these:

■ Injury or illness of insured, travel companion, family member, or business partner
■ Hurricane or natural disaster strikes your destination
■ Bankruptcy or financial default of travel supplier such as an airline
■ Terrorism or mandatory evacuation at destination
■ Death or hospitalization of destination host
■ Home or business damaged, vandalized, or burglarized
■ Jury duty, a required court appearance, or military redeployment
■ Required to work, terminated, or transferred
■ Victim of felonious assault prior to trip
■ Traffic accident prior to trip
■ Theft of passport or visa prior to trip
■ School year extension
■ Legal separation or divorce
■ Loss of accommodations abroad due to an illness or death of host family or friends
■ and more
It’s important to carefully review the plan details to understand the covered reasons for cancelling a trip. Note that with travel insurance plans you usually have a review period – a 10- to 14-day time frame in which you can review the plan, make changes, and/or cancel the plan for a refund if it won’t work for your needs.3. You have a medical emergency
Medical care can be expensive anywhere you go, and if you are in a foreign country, your health insurance network may not cover you. That means you could have to pay for your emergency medical care out of pocket or with a credit card.

With a travel insurance plan that includes medical coverage, you’ll have the coverage you need to get treatment – often without paying anything up-front.

Travel medical insurance also includes other benefits that can be of use to home exchange travelers, including:

● Trip interruption (the cost of additional airfare if you’re called home for an emergency)
● Accidental Death & Dismemberment (AD&D) and travel accident benefits
● Lost and/or delayed luggage benefits
● Even some travel delay coverage

Travel medical insurance tends to be affordable. If you have few pre-paid travel costs or your airline tickets are covered for changes or cancellations, then consider buying a travel medical plan, and avoid the extra cost of cancellation coverage, to cover your medical expenses outside your health insurance network.

With any travel or medical insurance you need to read the policy carefully, especially regarding “pre-existing conditions.” If you purchase your travel insurance plan soon after making your initial trip payment, pre-existing conditions are covered with no extra premium charges.4. You need a medical evacuation
If a traveler is injured or killed on their trip and an evacuation is necessary it will be expensive and troublesome to manage if you are in another country. Once initial medical treatment is received and the traveler is stable they will have to get home. Specially equipped and staffed medical flights are expensive.

Travel insurance plans with adequate evacuation and repatriation coverage means you won’t have to pay for medically necessary evacuations or the repatriation of a traveler’s remains to their primary residence. The coverage limits range between $25,000 and $1,000,000 but a medical evacuation can easily cost a hundred thousand dollars or more depending on your location and treatment needs.

Note: travelers who are staying within the borders of their home country do not need this coverage because it only applies once you leave the border.
Why buy ‘cancel for any reason’ coverage?
Home exchange travel is troublesome in that standard trip cancellation benefits may not be available if your partner cancels. ‘Cancel for any reason’ fills those gaps and protects your non-refundable trip costs in the event the home exchange has to be cancelled for a reason that is outside the guidelines of standard trip cancellation coverage.

‘Cancel for any reason’ will protect you in situations like these:

● A terrorist attack occurs and you’re scared to fly right now
● Your boss demands that you stay and finish a work project
● You’ve been invited to interview for the job of a lifetime – during your trip
● Your beloved pet is ill or dying
● Your nanny is deported
● You change your mind
● You decide you can’t afford the trip after all
● Your home exchange host changes their mind

There are many reasons that a home exchange agreement can fall apart and many of those reasons are not covered by standard trip cancellation. If you’ve already purchased airline tickets and other non-refundable travel arrangements, ‘cancel for any reason’ can protect that investment.
As a final note …
Travel insurance plans allow travelers to add coverage for special situations that are not covered by the standard plan coverage. If you’re an adventurer and want your medical care covered even if you’re underwater diving, or hang-gliding, or backcountry skiing, for example, you’ll want to add the coverage you need to protect yourself in those situations as well. Travel insurance has those options.

About the Author: Damian Tysdal is the founder of TravelInsuranceReview.net, and he believes travel insurance should be easier to understand. See more from Damian on Google+.